diff --git a/backend/utils/__init__.py b/backend/utils/__init__.py
index dd7ee44cc..a93f712f3 100644
--- a/backend/utils/__init__.py
+++ b/backend/utils/__init__.py
@@ -1 +1,3 @@
-# Utils package
+from . import traceroot_wrapper
+
+__all__ = ['traceroot_wrapper']
diff --git a/utils/traceroot_wrapper.py b/backend/utils/traceroot_wrapper.py
similarity index 83%
rename from utils/traceroot_wrapper.py
rename to backend/utils/traceroot_wrapper.py
index ac03e6c3a..5ad9c8e32 100644
--- a/utils/traceroot_wrapper.py
+++ b/backend/utils/traceroot_wrapper.py
@@ -1,9 +1,16 @@
 from pathlib import Path
 from typing import Callable
 import logging
-import traceroot
 from dotenv import load_dotenv
 
+# Try to import traceroot, but handle gracefully if not available
+try:
+    import traceroot
+    TRACEROOT_AVAILABLE = True
+except ImportError:
+    TRACEROOT_AVAILABLE = False
+    traceroot = None
+
 # Auto-detect module name based on caller's path
 def _get_module_name():
     """Automatically detect if this is being called from backend or server."""
@@ -26,7 +33,7 @@ env_path = Path(__file__).resolve().parents[1] / '.env'
 
 load_dotenv(env_path)
 
-if traceroot.init():
+if TRACEROOT_AVAILABLE and traceroot.init():
     from traceroot.logger import get_logger as _get_traceroot_logger
 
     trace = traceroot.trace
@@ -69,7 +76,10 @@ else:
 
     # Log fallback mode
     _fallback_logger = logging.getLogger("traceroot_wrapper")
-    _fallback_logger.warning("TraceRoot not initialized - using Python logging as fallback")
+    if TRACEROOT_AVAILABLE:
+        _fallback_logger.warning("TraceRoot available but not initialized - using Python logging as fallback")
+    else:
+        _fallback_logger.warning("TraceRoot not available - using Python logging as fallback")
 
 
 __all__ = ['trace', 'get_logger', 'is_enabled']
diff --git a/server/utils/__init__.py b/server/utils/__init__.py
index e69de29bb..a93f712f3 100644
--- a/server/utils/__init__.py
+++ b/server/utils/__init__.py
@@ -0,0 +1,3 @@
+from . import traceroot_wrapper
+
+__all__ = ['traceroot_wrapper']
diff --git a/server/utils/traceroot_wrapper.py b/server/utils/traceroot_wrapper.py
new file mode 100644
index 000000000..5ad9c8e32
--- /dev/null
+++ b/server/utils/traceroot_wrapper.py
@@ -0,0 +1,85 @@
+from pathlib import Path
+from typing import Callable
+import logging
+from dotenv import load_dotenv
+
+# Try to import traceroot, but handle gracefully if not available
+try:
+    import traceroot
+    TRACEROOT_AVAILABLE = True
+except ImportError:
+    TRACEROOT_AVAILABLE = False
+    traceroot = None
+
+# Auto-detect module name based on caller's path
+def _get_module_name():
+    """Automatically detect if this is being called from backend or server."""
+    import inspect
+    frame = inspect.currentframe()
+    try:
+        # Go up the stack to find the caller
+        caller_frame = frame.f_back.f_back if frame and frame.f_back else None
+        if caller_frame:
+            caller_file = caller_frame.f_globals.get('__file__', '')
+            if 'backend' in caller_file:
+                return 'backend'
+            elif 'server' in caller_file:
+                return 'server'
+    finally:
+        del frame
+    return 'unknown'
+
+env_path = Path(__file__).resolve().parents[1] / '.env'
+
+load_dotenv(env_path)
+
+if TRACEROOT_AVAILABLE and traceroot.init():
+    from traceroot.logger import get_logger as _get_traceroot_logger
+
+    trace = traceroot.trace
+
+    def get_logger(name: str = __name__):
+        """Get TraceRoot logger instance."""
+        return _get_traceroot_logger(name)
+
+    def is_enabled() -> bool:
+        """Check if TraceRoot is enabled."""
+        return True
+
+    # Log successful initialization
+    module_name = _get_module_name()
+    _init_logger = _get_traceroot_logger("traceroot_wrapper")
+    _init_logger.info("TraceRoot initialized successfully", extra={"backend": "traceroot", "service_module": module_name})
+else:
+    # No-op implementations when TraceRoot is not configured
+    def trace(*args, **kwargs):
+        """No-op trace decorator."""
+        def decorator(func: Callable) -> Callable:
+            return func
+        return decorator
+
+    def get_logger(name: str = __name__):
+        """Get standard Python logger when TraceRoot is disabled."""
+        logger = logging.getLogger(name)
+        if not logger.handlers:
+            # Configure basic logging if no handlers exist
+            handler = logging.StreamHandler()
+            formatter = logging.Formatter('%(asctime)s - %(name)s - %(levelname)s - %(message)s')
+            handler.setFormatter(formatter)
+            logger.addHandler(handler)
+            logger.setLevel(logging.INFO)
+        return logger
+
+    def is_enabled() -> bool:
+        """Check if TraceRoot is enabled."""
+        return False
+
+    # Log fallback mode
+    _fallback_logger = logging.getLogger("traceroot_wrapper")
+    if TRACEROOT_AVAILABLE:
+        _fallback_logger.warning("TraceRoot available but not initialized - using Python logging as fallback")
+    else:
+        _fallback_logger.warning("TraceRoot not available - using Python logging as fallback")
+
+
+__all__ = ['trace', 'get_logger', 'is_enabled']
diff --git a/utils/__init__.py b/utils/__init__.py
deleted file mode 100644
index 8b1378917..000000000
--- a/utils/__init__.py
+++ /dev/null
@@ -1 +0,0 @@
-